Between signing your purchase agreement and closing on the home is the mysterious escrow period. As a seller, there is very little for you to do but wait, with few exceptions, but it is important to understand what happens during this very important time.
Escrow starts when you and the buyer sign the agreement and choose an escrow or title agent to serve as the intermediary in the transaction. During escrow, the escrow agent will order and prepare title reports, prepare the property deed, safeguard and disburse funds and documents to the parties involved and oversee the entire transaction.
The escrow officer processes escrow according to written escrow instructions, which include conditions that must be met before escrow is closed and funds and documents are disbursed.
As a seller, the most important jobs for you during escrow are making sure your home is available for appraisals and inspections, preparing statements and forms and meeting contingencies you agreed to in your purchase agreement within the specified time frame. You will also need to be available to deal with any and all problems that come up. If a title search finds a lien on the property placed by a contractor who says you did not pay the bill, for example, you will either need to pay or find a way to clear the title.
The buyer is not the only one who must agree to the price for the home. Unless the buyer is paying cash, the lender will also require an appraisal on the property.
One of the biggest hurdles you will face is the inspection contingency of the purchase agreement. Hopefully you chose to have your own inspection prior to listing the home to rule out major problems.
After receiving the inspection report, your contract most likely gives the buyer a few days to either approve or disapprove of the report. In most cases, the buyer will use the report to negotiate for necessary repairs. You have the option of agreeing to a reduced price, offering to pay for repairs, suggesting changes to the buyer's request, refusing some requests or insisting on a second opinion.
As a seller, you will also need to deal with any problems found with your house title very quickly. Sometimes this requires coming up with money to get rid of liens from unpaid bills or getting a statement to prove the debt is no longer owed.
Finally, you will need to prepare for the final walk-through of your home, which takes place right before closing. This walk-through gives the buyer a chance to make sure everything is in the agreed-upon condition.
You will need to have moved out of the home, unless agreed otherwise, have made negotiated repairs, left behind fixtures and left the home clean. If you fail to meet any obligations, the buyer can use this to delay closing, bring up new last-minute requests or cancel the sale completely.